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Spain’s Stock Exchange to Facilitate Certificates of Blockchain Collateral Pledge

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According to reports, Spain’s largest stock exchange ‘Bolsa de Madrid (BME) stated that it expects to go live by the end of 2019 with a system based on blockchain technology in order to certify collateral pledges after the technology has been tested.  According to the exchange, the test “has shown a reduction in the total times of end-to-end processes exceeding 80 percent.” The exchange further stated that “The system allows market participants to avoid exchanging paper certificates and monitor the process in real time.”

According to BME, it was DLT-Lab (BME’s own distributed ledger technology division) who developed the proof of concept in partnership with regulators and various financial institutions, including BME Clearing (BME’s subsidiary), the Spanish central securities depository IBERCLEAR; and investment bank Renta 4 Banco, which pledged collateral to cover customers’ positions.

According to Berta Ares, head of digital transformation at BME, “DLT technology allows us to reduce times drastically and improve the operation and control of the system, providing legal certainty for electronically generated certificates and maintaining privacy and compliance with the General Data Protection Regulation.”

Head of IT systems (Renta 4 Banco), Teresa Sanchez further added by saying “this innovation project is aligned with the strategy of digitization, automation and continuous improvement of Renta 4 Banco’s customer service.”

However, this is not one of the only incidents where BME has set its foot in the world of the blockchain. Previously in summer, BME also contributed to a joint project of many Spanish banks called FLR (Fast Track Listing). The pilot testing blockchain tech in order to store stock warrant issuances further included Spanish National Securities Marke Commission, Banco Santander, BBVA, Paribas, Caixa bank and Commerz bank.

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